ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Friday, January 3, 1997 TAG: 9701030056
SECTION: BUSINESS PAGE: A-6 EDITION: METRO
DATELINE: NASHVILLE, TENN.
SOURCE: KARIN MILLER ASSOCIATED PRESS
AFTER LEARNING THE HARD WAY, he's taking his lessons to the airwaves to tell others how
Regina from Russellville, Ky., sounds desperate.
She's $10,000 in debt because of her husband's strokes, and the creditors are calling. She makes only $25,000 a year to support herself, her husband and two teen-agers. What is she going to do?
``You're going to have to do some painful things to get out of this,'' Dave Ramsey tells her over the phone and, at the same time, thousands of listeners tuned into his ``The Money Game'' financial advice radio talk show.
Regina must sell the car that costs her $287 a month, Ramsey says, and instead, drive the paid-for car her children are using.
``They're gonna scream and yell, but you've got to do it,'' he says.
Ramsey is known to audiences in the Southeast and Northwest for his tough approach to getting out of debt. Soon he'll be heard and seen nationwide.
He's going on a book tour promoting a new version of 1992's ``Financial Peace,'' which is landing him on programs such as ``The Today Show,'' and he'll be heard on an expanded radio market.
Audiences will hear Ramsey tell people like Regina to keep giving money to their churches, despite what creditors say. (He closes every show with the a bit of religious advice that the only way to ``financial peace is to walk with the Prince of Peace.'') And to hold her head high and work with the creditors on a plan to pay them off and then do it.
He knows firsthand what they're going through.
``I have been there. It is not easy. It is not easy. But you can do it,'' he says.
Ramsey doesn't hesitate to tell everybody who asks what happened and how he got out of debt.
In 1985, he was 26, driving a Jaguar and carrying a $4million real estate portfolio. But he also had $1.2million in 90-day notes from a bank. When the bank was sold, the new owners called all his notes.
That started a chain reaction in which he lost everything except his house and his wife. It took him three years to pay off all his debt.
Now, he's working his way back to millionaire status, but he owes no money, drives old, paid-for vehicles and hasn't loaded his life down with expensive things. That's what he wants for everyone, advocating ``what in 1950 was called common sense.''
That means living within your means, not spending more than you earn.
``There's nothing original about what I do, except in the presentation. I've been there, done that. I've got the T-shirt with the zeros on it,'' he said. ``It makes me approachable. It makes me touchable. It's not just the blathering of some guy's ego.''
His advice to the debt-ridden includes:
* A ``plasectomy,'' or cutting up all your credit cards;
* Attacking the debt with a budget, ``where you spend every dollar on paper before the month begins'';
* Using a ``debt snowball,'' where you list debts from smallest to largest, then pay the minimum on all the debts except the smallest. When it's paid off, use the money you were spending on the next largest debt, and so on;
* Either pay cash or don't buy it.
But first, Ramsey says, you've got to want to change your life.
``It's like waking up the adult inside each one of us, when the child has been managing the money,'' he said.
Ramsey has earned thousands of supporters who credit him for their new debt-free lives. He also has critics, especially the bankers, insurers and car dealers that he ridicules.
Nashville banker Brian Carden called Ramsey a yahoo and compared him to Jim and Tammy Faye Bakker in a column published in the monthly Nashville Business in Review.
``You cannot get a haircut over the phone, and you cannot get financial advice over the radio,'' Carden wrote.
Ramsey disagrees.
``I don't have to do a full financial plan to know you need to be out of debt,'' he said.
With a fortune lost and a new career as a debt adviser found, Dave Ramsey is expanding from a Nashville radio show, book and seminars to national exposure.
LENGTH: Medium: 85 lines ILLUSTRATION: PHOTO: AP. With a fortune lost and a new career as a debtby CNBadviser found, Dave Ramsey is expanding from a Nashville radio show,
book and seminars to national exposure.